Notice that you have the bare variables i and i2. They ought to be $i and $i2 instead (you forgot the $). Also, the array @offset2 is not defined yet at this code point. Plus, indexing into an array should be $karray[$i] instead of @karray[$i].

Then, I notice that you call ord and chr a lot. You are joining characters only to split them later again, and that is (wasted) redundant work. In the case of the key array, you can start off by mapping the ordinals:

That saves you the work of calling ord like ord($karray[$i2]) a whole bunch of times. This can also apply to your offset arrays. Keeping all your array elements as ordinals will make your code more concise; no need for intermediate strings.